I wrote “Thoughts on the Revaluation” on September 22 predicting a 30% increase in the average property based on 284 sales of houses and condos between 2022 and 2023. Of note this was relatively small sample, 4% of all homes, and the sample includes a wide range of circumstances including foreclosures, new construction, co-ops and tear-downs. Less than one third of sales behaved like the average sale. Now that the results are in, and homeowners have been notified the reality is beginning to sink it and many homeowners are upset. In an effort to explain the relationship between the revaluation and taxes, the Chairman of the Board of Finance published a letter on December 4 saying the Grand List increased by 25% and predicted the mill rate set in May would decline by a corresponding amount, less any increase in the budget. In his example a typical tax bill might rise by 2%.
According to the Assessor’s office homeowners are requesting an informal appeal. The deadline to request an “informal appeal” was December 27 and appeals are being heard this week. The formal appeal period will occur during the month of March in front of the 3-member Board of Assessment Appeals. Appointments for those appeals can be made between February 1 and 20, 2024. In 2013 285 appeals were filed and 187 were successful. 13 others filed lawsuits.
Email me for the Revaluation spreadsheet of 6,482 properties or download it from the town website. It shows a few basic facts (age, bedroom count, square feet, acreage) and compares the 2023 appraisal to the 2018 appraisal in dollars and percent. By geocoding every home and creating a heatmap we show the percent change of every home’s revaluation. The interactive version is on my website, TheEngelTeam.com and at NewCanaanSentinel.com.
The design types that show the highest appreciation are Multi- Family (57%), Duplex (49%) and Ranch style (40%). Why? These are homes that had a relatively low value in 2018 and tend to have a higher potential for redevelopment during a hot market. This was the case during Covid, when builders began to compete with first-time homebuyers for these homes.
Nearly half of all homes are Colonials (3,185 or 49%) followed by Custom Design (577 or 9%), Cape (540 or 8%) and Ranch (443 or 7%). The assessor evaluated 205 pool houses, 287 cottages, and 3 log homes. I was surprised we have log homes in New Canaan.
The greatest number of appraisals (1359 examples or 20%) were between $1,050,000 to $1,400,000 followed by $1,400,000 to $1,750,000 (1190 examples, 18%). If you fall within these ranges you should be able to find many comparable sales. Similarly, most houses have 4 bedrooms (2258, 34%) or 5 bedrooms (1728, 26%) followed by 3 bedrooms (777, 12%) and 6 bedrooms (662, 10%). Surprisingly, 531 homes on the list (8%) have 0 bedrooms which in most cases means outbuildings. 100 Barnegat is one such mystery, listed as a 0-bedroom cape. Zillow thinks its 386 feet with 3 bedrooms. Both are wrong.
There are only a few co-ops in New Canaan, all of them built by George Platz. The 10 units at Hatfield Mews increased by 40%. The 4 units at Churchhill Walk increased by 29%. Canaan Square on Mead Street increased 39%. Three of the four co-op sales this past year occurred at Southgate and yet Southgate was reevaluated with only a 16% increase.
How about the high end? The Symington Estate, 33 acres on West Road, increased 34% to $20 million whereas the “Beau Chateau” occupying 52 acres on Dans Highway rose only 4% to $17.7 million. Waveny Castle’s sister property, “Orchard’s End” on Oenoke Ridge, a grand gothic stone mansion designed in 1910 by William Tubby appraised for $8.75 million, up 28%. Some of us have known it as “the Mayor of Mexico City’s house” since 1980 when the Mayor paid $875,000. for it.
I looked at the oldest houses in town. Of the 91 homes built before 1800 their assessments increased by an average of 23% to $1.97 million. 3 of the 91 actually decreased in assessment. Two of them are understandable because they sold recently but the third is inexplicable.
Only 5 years ago New Canaan experienced a very different Revaluation, a drop in the Grand List of -7.15% with the largest decreases associated with the most expensive homes. In 2018 homes over $3 million saw an average decrease of -14%. Now, looking at the 228 homes worth more than $5 million (averaging $7.35 million) we see a range of between -8% and 695% (which occurs when high- end new construction replaces an empty lot or teardown) Those are the exceptions with the average rising 29%.
In conclusion: it is difficult to find patterns in the data this time around. We want to find trends around which we can build a narrative, “people want to be close to town” or “people want more land” or “everybody is downsizing” but in fact all of these factors were true simultaneously and consequently no one group stood out as a particularly reliable predictor of value. Looking at a heat map of Adams Lane, for example, you could not determine from the colors on the map showing percentage change whether a house was large or small, new or old, on a large lot or small, or a colonial or ranch. Similarly, comparing Adams Lane to other neighborhoods around it was useless. The map looks as random as pebbles on the beach.
Notes From The Monday Meeting
The Spring market is starting early this year. In the first week of January we saw 4 sales and 3 go pending in a market of only 40 houses, all between $1.4 and $4.4 million. 3 more are “coming soon” between $2.1 and $3.2 million. Houses that languished in the fall are getting multiple bids this week. Buyers are getting pre-qualified lining up financing while sellers finish work preparing their houses to list.
In “Thoughts on the Revaluation,” a 30% increase in average property value was predicted based on a small, diverse sample of 284 sales. However, the reality has been unsettling for many homeowners. The Board of Finance Chairman noted a 25% increase in the Grand List and a potential mill rate decrease. Homeowners are now seeking appeals, with a formal appeal period in March. The article also discusses property types, noting high appreciation in Multi- Family, Duplex, and Ranch styles due to their redevelopment potential. The majority of homes are Colonials, with a significant number of unique property types like log homes. Appraisal ranges and bedroom counts vary, with anomalies like 0-bedroom listings. Co-ops in New Canaan have seen varying increases. High- end properties showed diverse valuation changes. The article observes no clear trends in the revaluation data, finding it as random as pebbles on a beach. The Spring market is starting early, with active sales and listings in the first week of January.
John Engel is a Realtor on the Engel Team at Douglas Elliman and a host of the podcast “Boroughs & Burbs” on Youtube, Facebook and VoiceAmerica.com Thursdays at 3pm. This week we recap the 2023 real estate market in New York City because, to quote Governor Lamont, “when New York City sneezes, Connecticut catches cold” Right now New York City is one of the few places with abundant inventory. You can buy a nice 2-bedroom apartment in midtown for under $1 million for the first time in years. Why?
Check out John Engel’s Podcast, Boroughs & Burbs, the National Real Estate Conversation here.
